California regulators consider electricity pricing changes

SAN FRANCISCO (AP) — California utility regulators are considering a new electricity pricing system that would likely result in bigger bills for most ratepayers.

The California Public Utilities Commission will study and vote on whether to change the standard price of electricity depending on the time of day it was used, rather than the current system based on the amount of power consumed, according to the San Francisco Chronicle.

Proponents say the new pricing scheme would encourage conservation during afternoons when demand is at its peak.

Consumer advocates say the pricing changes would likely raise bills significantly for people in hot areas who rely on air conditioning.

Ratepayers would still have the option of choosing a flat rate, which would rise for those using the least electricity and be reduced for the largest power users.

An average Pacific Gas & Electric Co. customer currently pays about $75 per month. Under the new "time-of-use" system, that customer would see a 16 percent increase in rates, to about $87.

If that same customer chooses the flat rate option, it would be a 13 percent increase, or about $85.

The changes would apply only to customers of investor-owned utilities like PG&E, not municipal utilities like those in Los Angeles and Sacramento.

The new pricing system would benefit the largest electricity users, who would save 17 percent under the time of use system and 14 percent under the flat rate.

Some see the idea as unfair to people in the Central Valley and other areas where 100-degree weather is commonplace.

"When it's 100 degrees out, I'm not sure it's reasonable to ask anyone to do without their air conditioning," Matthew Freedman, an attorney with The Utility Reform Network, told the newspaper. "There's a rude awakening that lies ahead if the PUC pushes ahead on time-of-use pricing. The potential for a customer backlash is real."

But the system is meant to fix a pricing scheme that currently charges significantly more for heavy electricity users.

The commission says people in the lower pay tiers now do not pay enough to cover the costs of sending electricity to their homes, which led upper-tier customers to complain to state lawmakers.

After those complaints, the Legislature authorized the PUC to overhaul the pricing system.